Can data centre company Firmus live up to its blockbuster $43 billion listing value? Why some investors doubt it

Firmus Technologies, a developer of artificial intelligence (AI) data centres, plans to raise A$7 billion from investors on the Australian Securities Exchange on October 23.

The float values the company at up to $43.7 billion. That makes it the second-largest initial public offering (IPO) in Australian history, after Telstra in 1997.

But many investors doubt Firmus is worth that much.

The company is losing money. And only about 5% of the capacity it has sold is up and running, compared with roughly a quarter for rivals such as NextDC. Yet it would be valued at about four times NextDC, Australia’s largest listed data centre company.

We have yet to see the company’s financials — including current and forecast revenue, debt levels, or the cost of building the data centres — which should be released in the company prospectus on Thursday.

Late on Wednesday, a media report said the company’s bankers were even considering lowering the announced offer price.

Why the Firmus IPO is raising eyebrows

Firmus is controversial for several reasons.

First, its track record is short. Only two of its data centres are currently operational. The rest are still in the planning or construction phase.

Second, there is a public backlash in Tasmania. Locals say they were not properly consulted about its three giant data centres.

Third, there is its leadership. The two co-chief executives are cousins. One of them, Oliver Curtis, is a former investment banker who went to jail for insider trading a decade ago.

The team has shown it can raise money. It is less clear it can deliver multibillion-dollar building projects in a crowded market.

Most importantly, Firmus is selling shares when AI valuations are already high. And its price sits at the top end of similar AI infrastructure companies.

Australia’s largest listing in 30 years

Firmus’s value has risen steeply in less than a year. In November 2025, a private funding round valued it at about A$6 billion. In August 2026, another private round valued it at more than US$10.5 billion (about A$15 billion).

Now Firmus wants public investors to value it at A$43.7 billion. That is almost three times its value just two months ago.

It is not clear what justifies such a jump. Firmus has signed new deals since August, including one with OpenAI. But their value has not been made public.

The company is still losing money. And most of the capacity it has sold has not been built yet.

Big names back it, including chipmaker Nvidia and US private equity giant Blackstone.

The listing on October 23 looks like being Australia’s largest since the Telstra privatisation in 1997.

The float and its valuation matters for ordinary Australians. If Firmus joins major share indices, index funds must buy it. With many super funds investing in index funds, this means workers will end up owning a piece of Firmus whether they choose to or not, through their super fund.

We estimate this could mean $500 million to $1 billion of buying by passive funds in its first three months.

What does the company do?

Firmus builds what it calls “AI factories”. These are data centres packed with Nvidia chips. It rents their computing power to big tech firms such as Meta and OpenAI.

This is different from traditional data centre firms such as NextDC or AirTrunk. They mostly rent out space and power. Their customers bring their own chips. Firmus owns the chips itself.

That brings risk. Nvidia releases new chips every year and older chips lose value fast. This means Firmus could get stuck with out-of-date chips, if the industry moves to newer varieties or abandons Nvidia’s chips altogether.

Firmus also has only a few big customers. And Nvidia is an investor, a supplier and a customer at the same time. If Nvidia loses its dominant position (say, if its chips become obsolete), companies like Firmus would go down with it.

The numbers tell the story. Firmus has signed contracts for 912 megawatts of capacity. But only 46 megawatts, about 5%, is running. It expects to lose A$77 million in the first half of this financial year.

The RBA is warning on the risks

Just last week, the Reserve Bank of Australia warned the risks of circular AI financing are creating vulnerabilities in the financial system. It named a possible trigger: investors losing faith in the profits of the big AI spenders.

The RBA did not name Firmus. But almost every element of its warning describes it. Firmus depends on big tech spending. It funds its build-out with debt. And its key supplier, Nvidia, is also its investor and customer.

Economists at the Bank for International Settlements found such ties are common. Nearly half the value of deals between AI firms involves companies that also trade with each other. They compare this to the telecoms bubble of the late 1990s.

Communities are protesting

Firmus plans three sites in northern Tasmania. The biggest, at Bell Bay, would make it the state’s largest electricity user.

About 6,000 people signed a petition against Bell Bay. More than 9,000 signed a petition to parliament calling for a pause on new AI data centres. Students walked out of class in Launceston in protest.

Firmus says its sites use little water and run on Tasmania’s mostly renewable power.

Is there an AI bubble in the making?

Big new technologies often go through a bubble. Investors get excited and prices rise too far. Then the bubble bursts. It happened with railways in the 1800s and the internet in the late 1990s. In both cases, the technology changed the world. But many investors still lost money.

Read more: Today’s AI hype has echoes of a devastating technology boom and bust 100 years ago

Many people now ask whether AI is following the same path. The hard part is knowing how far along a bubble we are.

The signs are mixed. The US tech giants plan to spend about US$900 billion on AI infrastructure this year. Yet AI earns only around US$150 billion to US$220 billion a year in revenue, according to The Economist. Shares in the biggest AI firms have fallen about 20% since June.

AI demand is real, and Firmus has blue-chip customers.

But at this price, investors are betting that everything goes right. Through index funds and super, many Australians will be making that bet too.

Read more: Australia’s data centre build-out carries risks for the economy – and inflation